The failure-speed ethos: notes from a glocal startup scene

ABSTRACT

Technology startups are integral to local and global economies, with distinctive cultural logics that shape the nature of work in this sector and the technological developments generated therein. As an emergent market, Australian technology startups offer a window into global-local dynamics and a lens on the cultural forces at play. Based on three years of ethnographic research (2019–2022), I identify prevailing values that drive and animate both culture and practice in Australia’s startup domain. Findings show the sector suffused by a paired value set: failure and speed, converged into a failure-speed ethos. Through interviews, observations, and document analysis, I delineate and illustrate the failure-speed ethos, trace its path through migration and institutional enculturation, and examine how the demands and costs of failure and speed distribute unevenly between positions within the startup ecosystem. Findings have implications for the nature of innovation work in a globalized society, the context of technological development, and the sociological processes by which culture spreads, embeds, and endures.

KEYWORDS:

• Startup
• innovation
• startup culture
• glocal
• ethics
• sociology

Introduction

Just off the escalator, I stood with an associate from the government supported coworking space located in Sydney’s central business district. His voice projected over a whistling espresso bar as we took in a visual of the site’s current occupants, symbolized by so many framed logos hung lightly upon a timber-paneled wall. Encircled by a sandy border, each frame showed slick graphics behind clear glass. My guide pointed out new additions and rising stars, removing a few frames as we spoke – representing companies that had closed, merged, or were otherwise now gone. This modular display was fluid and lithe, ready for new framed logos, the subtraction of old, or the exchange of one icon with its freshly rebranded variant. It echoed patterns already surfacing in my early months of research, developing further in the years to come, whereby two values and related practices showed collective centrality within Australia’s startup scene: failure and speed.

The following is based on three years of ethnographic study within Australia’s technology startup sector (2019–2022), observed through the prism of glocalization. Glocalization is the diasporic blend of global cultural forces into local sites of action, weaving the logics of cultural hegemons into many and diverse locales (Robertson, 1995). Startup culture is characteristically glocal, emerging from and adapting a Silicon Valley core. As a site of glocalization, the Australian case is at once sociologically significant and analytically rich, splicing cultures amidst global and local transition.

During the period of data collection, the Australian sector surpassed significant funding milestones, brought big money from overseas, and began opening global offices. Government support for the industry was effusive in both rhetoric and resources, while individual Australian entrepreneurs were now counted among an exclusive class of tech-billionaire elites. During this same period, Silicon Valley faced social critique, regulatory pressure, and economic instabilities – a departure from the financial excess and cultural veneration of the 2010s (Vynck & Lerman, 2022; Wile & Ingram, 2022). Against this backdrop, understanding if, how, and to what effect extant global standards shape Australia’s cultural-practical norms would be instructive and predictive, shedding light on the forces of cultural inertia and possibilities for change.

This time of transition would also elucidate cultural levers, offering the unique analytic clarity of a culture-in-process (Swidler, 1986) as the Australian sector tested its footing on the world’s stage. It is from within this transition that a failure-speed ethos emerged as a social fact of the startup industry, animating both logic and practice. Resonant with startup studies across the globe, failure and speed figured prominently in the Australian startup scene. Here, we observe their convergence, merging failure and speed into a conceptual whole that exceeds the sum of its parts.

Background and literature

Startup culture

There is no single definition of ‘startups’, but a collection of shared features and sensibilities that characterize this business genre. Startups are generally young, self-funded and/or reliant on venture capital, offering ‘disruptive’ products rather than existing ones (Said et al., 2022; Sataev Pavel, 2021; Ziakis et al., 2022). Less tangibly, startups are recognizable by cultural and esthetic norms, originating with guru-like figures like Eric Ries (2011), whose vision of ‘lean’ and ‘agile’ startups presents them as human institutions designed to create new products and services under conditions of extreme uncertainty (p. 7), and Jack Thorne, who defines startups by acts of insane perseverance in the face of constant rejection.¹

These cultural sentiments condition the nature of work in the technology startup sector (Avle et al., 2019; Irani, 2019; Lindtner, 2020; Neff, 2012; Noble & Roberts, 2019), the products this sector creates (Marwick, 2013; Noble, 2018; Seaver, 2019; Sloane & Zakrzewski, 2022; Wajcman, 2019), and broader socio-structural arrangements through active channels between startup ventures and Big Tech firms (Zuboff, 2019). Technology startup culture thus has dual sociocultural relevance – representing a growing domain of work and labor in contemporary societies and the circumstances under which new technologies develop.

How startup culture matters: conditions of work and product development

All work contexts involve interrelated economic, political, and ideological dimensions (Burawoy, 1990), and such is the case with technology startups. Sowed from the roots of Silicon Valley where startup culture was born and still thrives, this professional reality is marked by individualized risk, rapid change, insecurity, and precariousness – sustained through venture capital and moon-shot aspirations (English-Lueck, 2017; Little & Winch, 2021; Marwick, 2013; Neff, 2012; Noble & Roberts, 2019; O'Mara, 2020; Saxenian, 1996, 2007). Research indicates that 90% of startups fail, 70% do so in the first year, and failure rates are disproportionately high among technology companies compared to other business categories (StartupGenome, 2022). Despite its high-risk profile, the sector is densely populated and growing. Globally, data show ∼305 million new tech startups each year (Wise, 2023), with an increasing number of registered businesses over the past decade (StartupGenome, 2022). Given the centrality of work in people’s lives as a source of identity, opportunity, and as an activity in which they spend considerable time, understanding the nature of work in this sector is a pertinent sociological task.

Understanding the sector is also relevant for discerning the conditions under which new technologies develop. Technologies are always social, political, and value-infused, with shaping effects upon individuals and whole societies (Davis, 2020; Friedman, 1996; Frieman, 2021; Schraube, 2009; Winkler & Spiekermann, 2021; Winner, 1980). Buoyed by billions of dollars in investment (Redrup, 2022; Westfall, 2021), support from prestigious institutions of higher education (Hendy, 2022; Lasrado et al., 2016; Legatt, 2019), government programs (Irani, 2019; Lindtner, 2020; Maalsen et al., 2022; O'Mara, 2020), and cultural cache (Little & Winch, 2021; Marwick, 2013), the startup sector is a key site from which innovations arise. The implications of this amplify when considering the potential for startups to evolve into, or get subsumed by, the Big Tech firms that structure and govern myriad elements of individual and collective life (e.g., Apple, Amazon, Facebook/Meta, Google/Alphabet, Microsoft).

Australia and the global status-quo

Silicon Valley is the progenitor of a now globally diffuse startup culture (Saxenian, 2007). Irani’s (2019) account of India’s innovation sector, Lindtner’s (2020) foray into China’s Shenzhen region, alongside brandings such as Israel’s ‘Silicon Wadi’ (De Fontenay & Carmel, 2001) and Africa’s ‘Silicon Cape’ (Pollio, 2020) together demonstrate California’s creation permeating geographically distant locales. Though few studies have examined Australian startups, those that have shown a masculine-dominated sphere in which hackathons, coworking spaces and accelerator programs demand long hours, unadulterated passion, and immediate growth, (Maalsen et al., 2022), emulating the conditions of startups worldwide. We can also observe accelerator programs in the country drawing on overseas mentors, while the New South Wales government erects an innovation hub billed as the ‘Silicon Valley of Australia’ (NSW Government, 2020). The Australian sector is indeed wrapped in a global shroud, dominated by Silicon Valley with inflections from the European Union (EU), India, and other international pillars.

At the same time, Australia is geographically isolated, tightly regulated, and relatively risk averse (Schwab, 2019),² with historically small numbers of startup practitioners and low rates of capital – conditions that differ markedly from operations overseas. Australia’s size and regulatory environment were common topics among participants with whom I spoke, held as a point-of-difference from the United States (US) and a source of anxiety, stemming concerns about encroaching international standards that could overwhelm local markets for which those standards were unnecessary and ill fit. Moreover, the period of data collection was one of inverse trajectories, with fissures emerging across Silicon Valley while the Australian market scaled.

Industry reports showed exponential growth in the number of registered Australian companies and levels of investment in those companies, with funding surpassing $10 billion between 2021 and 2022 – a 208% increase from the prior year and more than 2018–2021 funding combined (CutThroughVentures & Folklore, 2022). Salient figures like Mike Cannon-Brookes and Scott Farquhar (cofounders of Melbourne-based Atlassian) were now multi-billionaires with global recognition and reach, while Australian companies like Afterpay had embedded into global commerce.³ Spurred by and supporting this growth, the Australian government opened strategic initiatives at the federal, state, and local levels, including a national Digital Economy Strategy with significant funds for startups,⁴ Sydney’s Tech Startups Action Plan,⁵ Melbourne’s Innovation Districts,⁶ Advance Queensland’s financial support for startups and entrepreneurs,⁷ Western Australia’s New Industries Fund,⁸ and the Northern Territory’s Innovation Territory initiative.⁹

This study is thus set in a period of transition, or what Swidler (1986) terms ‘unsettled times’. Such periods are socially, and analytically generative, as retrospective narratives have yet to crystalize nor have social patterns blended into an ostensible matter of course. From this vantage, potentialities abound and cultural processes elucidate.

Methods

Data come from interviews, observations, and participation within Australia’s technology startup sector between August 2019 and January 2022, along with ongoing review of email listservs, government documents, and industry reports totaling >1000 A4 pages of text, graphs, and images. Data collection and analyses follow an institutional ethnography approach (DeVault, 2008; Smith, 2005), focusing on the structural and cultural mechanisms that shape institutional relations and the higher-order factors that condition policies and practices (Schneiberg & Clemens, 2006). Although the whole of Australia is included in the study’s scope, the industry concentrates in Sydney and Melbourne and thus so too did my data collection.

Over three years of fieldwork, I interacted with hundreds of professionals working in and around Australian startups, traversing the ‘organizational bridges’ that constitute an expansive ecosystem (see Greene, 2021). This includes in-depth interviews with 50 founders, funders, consultants, public servants, educators, leaders within startup-related organizations, and those who operate accelerator programs. Most participants fit into multiple categories, concurrently occupying several professional roles and/or moving between them over the course of their careers. This fluidity is common within the technology sector in general, and among startups in particular (Orr & Davis, 2020). My access to practicioners and to various field sites was relatively seamless, as networking is highly normative, valued, and institutionally supported through sponsored events. Moreover, people were excited to talk about their own ventures and the growth of a budding Australian domain, thus welcoming me into their lives and professional communities.

I recruited participants through personal networks, networking events, cold calls, and referrals. About 70% of the sample identify as men and 72% identify as white. Many of the women and participants of color were recruited through intentional outreach via specific networks and/or specialized community groups. This gender-race (im)balance reflects a longstanding history and continuation of white masculinity in technology and innovation spheres (Hicks, 2017; Maalsen et al., 2022; Noble & Roberts, 2019), and emerged as a topic and tension among interviewees.

Interviews took place in-person or via video conference according to participants’ preferences and COVID-19 restrictions at the time, each lasting between 30-minutes and 2-hours, with regular follow-ups as new questions arose on my end, new insights occurred to participants, and as participants kept me apprised of changing situations (e.g., a company closed, obtained seed funding, moved overseas, etc.). All interviews included broad questions about participants’ backgrounds, their perspectives on and experiences in the startup sector, and their opinions about policy, ethics, and social responsibility. This loosely structured guide then gave way to tailored questions based upon the specific circumstances of the interview subject and organic developments through the course of our conversation(s).

In addition to interviews, I attended in-person and online networking events, expert panels, ‘pitch’ events, ‘demo days’, and site visits to the workspaces of startup practitioners. During each excursion I recorded images via mobile phone camera or screenshot, as relevant, integrating them into my fieldnotes immediately following the observation episode. These field notes combined with data from listservs, industry reports, and government documents to construct a holistic understanding of the sector.

I analyzed the data abductively, moving between established theory and inductive insights (Timmermans & Tavory, 2022). This entailed a process of familiarization in which I read all transcripts, documents, and field notes multiple times as discrete artifacts and as an amalgamated whole (Braun & Clarke, 2006; Charmaz, 2014). From this sensitizing process, general themes emerged that variously aligned with and diverged from existing literature, fostering both intellectual embeddedness and novelty in thematic construction (Timmermans & Tavory, 2022). I then undertook a three-step interpretive coding process, identifying key points of semantic meaning from the textual and visual sources and tagging these to appropriate data excerpts (stage 1); merging tags into themes and sub-themes, focusing on themes’ theoretical relevance (stage 2); and mapping themes and sub-themes in relation to each other (Braun & Clarke, 2006; Charmaz, 2014; Thompson, 2022). I treated boundaries between and within themes as porous such that single data excerpts could be, and often were, multiply categorized. For example, one participant’s statements about a long-held but floundering company fit simultaneously into themes about ‘cultural character’ and ‘eco-systemic asymmetries’, while several excerpts from a participant who runs accelerators tagged into both ‘enculturation’ and ‘conditions of technological development’.

In presenting the data, I select passages that represent the (sub)themes in which they are situated, backed by a trove of similar thematic content. Participant names are presented as pseudonyms and quotes are lightly edited for clarity and/or to mask identifiable information. In a small number of cases, participants are presented as composites where they might be otherwise identifiable.

Findings

Findings proceed in three sections examining (1) the cultural character of Australia’s technology startup sector, (2) the rise and enculturation of that character, and (3) how that cultural character operates throughout a multifaceted ecosystem.

Cultural character: the failure-speed ethos

Throughout the study, two values rose to the fore: failure and speed. Extant literature identifies both failure and speed as individual forces in startup culture, fundamental to the mindset and markets of startup companies (Appadurai, 2020; Davila et al., 2015; Irani, 2019; Lindtner, 2020; McRobbie, 2002; Neff, 2012; Shih, 2004; Tonkinwise, 2016). However, the confluence between failure and speed remains unaddressed. Here, I delineate failure and speed as a conceptual whole, encompassed by the construct of a failure-speed ethos.

The failure-speed ethos

The failure-speed ethos is an embracement of failure in service of speed. Undulating between acceptance and revelry, failure operates as a necessary trade-off, inevitable fact, point of collective pride, source of fraternal pleasure, and marker of individual fortitude that defines an entrepreneurial spirit. Together, these failure frames assume and justify speed’s priority position, rendering rapidity a foregone goal. This failure-speed ethos instructs and underpins a set of logics and practices for hurried ideation, live market testing, and blooming success out of duds and disasters.

Alex McCauley, Chief Executive of the not-for-profit organization StartupAUS, conveys this failure-speed ethos in a 2019 interview with SmartCompany,¹⁰ explaining the value of ‘failing fast’:

Most founders are looking to succeed fast, but failing fast is the next-best thing … If you’re looking to grow a business really rapidly, you’re probably doing something different to what’s already out there … That’s why there’s so much iterating, pivoting, and all the great words used about startups that really imply experimentation and innovation.

These rapid ‘pivots’ and ‘iterations’ featured prominently for many of the founders with whom I spoke. Dale, for example, was on the 16th version of his failed-then-revamped FinTech (financial technology) company when we met at a networking event in late 2020. The following week when I visited Dale’s office, he led me through a storage closet full of relics from the company’s prior lives – old tech, old branding, old employee files – creating a material exhibit of iterations gone by. I observed similar patterns forming for young co-founders Alicia and Jason, entrepreneurs in their early 20s who had rebranded an AI-driven data privacy product four times over the company’s first year. Citing mentorship advice, Jason explains their approach:

We’re going to market knowing that we're going to fail with these products … We are doing it to find out what won't fail (Jason).

This strategy is corroborated by George, an established entrepreneur and angel investor. ‘Getting to market fast is vital’ he explains about the startup world, and a significant factor in the companies he decides to fund. Comparing startups to legacy businesses, he criticizes the extended timelines of the latter. ‘Let's just launch and get something out there … ’ he says, emphasizing throughout the interview that failure should never be a deterrent.

The twinned values of failure and speed pervade the sector, running through formal, informal, and financial channels, as described above. They also flowed through the affective energy of startup events such as Melbourne’s ‘F*ck Up Nights’, expert presentations about ‘Failing Well’, and among a panel of women entrepreneurs during an online colloquium, described below through an excerpt from my fieldnotes:

Moderator: “Let’s go to failures now. What were your most challenging failures and how did you overcome them?”.

[Panelists smile knowingly]

Panelist One says her failures have been many, laughing as she recounts a shuttered business. “We promised tech we just couldn’t deliver,” she says with a shrug.

Panelist Two: “At [our company], we don’t like to call them failures, we think of them as painful learnings. There have been a lot of ‘learnings’ around the tech, and pricing, and staff”.

[Panelists and moderator all laugh] The chat fills with words of encouragement and supportive emoji—smiley faces, hearts, praise hands.

Panelist Three: “I agree. The only failure is not trying”.

Later, Panelist Three entreats the audience to “stop worrying about getting everything right. Just start”, while her co-panelists quote Nike in unison, (“Just Do It”) amidst a renewed wave of emoji-expressed support.

Existing research on innovation economies shows norms and values implicitly articulated, financially motivated, affectively driven, and socially reinforced (Avle et al., 2019; Greene, 2021; Gregg, 2015; Irani, 2019; Lindtner, 2020; Marwick, 2013; Neff, 2012). Such is the case with the failure-speed ethos in Australia’s technology startup sector, in which advice, practices, and socially cultivated wisdom entrench an embracement of failure in service of speed. To be sure, however, there were exceptions to the failure-speed ethos in both narrative and behavior. Interviews were peppered with discomforts, contradictions, and in a few cases, alternative paths and minor acts of resistance. Siva, for example, actively seeks investors that allow for longer lead times, rejecting demands to ‘move fast and break things’, while Felix, a new entrepreneur, insists his idea-stage venture will prioritize ethics rather than speed, even at the cost of growth and scale. These contained contentions at once reinforce the default status quo, while revealing cracks and frictions. As a default, however, the failure-speed ethos has significant effect, the implications of which we now explore.

Effects of the failure-speed ethos

Conditions of work. During our interviews, founders spoke about work in the sector as energetic and exciting, but also emotionally taxing and often exclusionary, especially for underrepresented groups. Mental and physical health were a regular topic among interviewees, describing exacting timelines and high rates of rejection. This rang true for Alicia, the young entrepreneur continuously rebranding her privacy product within its first year, who recounted the investors who ignored her during pitch meetings, spoke mostly to her co-founder Jason (a white man), and dismissed the company’s product as not ‘sexy enough’ to immediately grab consumer attention.

The ideals of failure and speed streamed through business practices, creating inconsistencies in some cases between those practices and practitioners’ own values and commitments. Clarke and Nathan, for example, both run small consulting firms branded as socially aware, inclusive, and progressive. During our respective interviews, both men bemoaned the industry’s pressing pace and rates of failure, while at the same time describing personal conduct based on investors’ accelerated schedules and high-risk demands. Naming these pressures, both explain how their own firms have ended up largely male and white, as have many of their clients’ companies, despite commitments to diversity.

We're aiming for as much diversity as possible but it's a challenge … when you're under pressure … It's all well and good to pontificate, but when something needs to be done tomorrow, it’s like, ‘I know Jim, my friend, who could do that’ (Clarke).

My experience has been interesting in building [company name]. Because there's this trade off … between speed to action and ideal. You’re faced with this conflict between what do we want to do and what can we do when we need to do something in five days. Your reach for what's closest. Now we've only got one female on the team. It’s not something we're proud of. But I think how we got there, and I can only assume that's the case for others is just that, you're forced to do what you can in the time allotted (Nathan, italics represent interviewee inflection).

For both Clarke and Nathan, discourses of inclusion sat in tension with their behavior, which prioritized and acted upon cultural-economic conditions that demand speed, framing failure – in this case failure of diversity – as the necessary cost of a quick-moving space. This tension reflects the way workplaces and work practices are conditioned to the culture of the sector, adhering to a failure-speed ethos and subject to its effects.

Conditions of technological development. Workplace cultures affect not only the people in them, but also product development. This is significant in the startup domain given rhetorical positioning of startups as ‘disruptors’ that (re)organize societies and usher in the future, coupled with active movement between startup developments and Big Tech firms (Maalsen et al., 2022; Neff, 2012; Sloane & Zakrzewski, 2022; Zuboff, 2019). In this context, the failure-speed ethos places parameters on innovation and in turn, on the societal effects those innovations foster.

We can observe this parameterization with Corrine, a 30-something entrepreneur and consultant, who spent several weeks in an accelerator program working on a safety assurance tool for post-war communities. She laughed about the ‘spectacular failure’ when investors ignored her product among a crowd of gamification apps and similarly ‘quick to market’ goods. In this vein, the head of an accelerator focusing on social enterprises (businesses with a social mission), told me about coaching socially minded entrepreneurs to prioritize fast financial value.

They all want to save the world and do good, but none of that matters if people don’t want your product. Investors need to know you have something that people want to buy.

This translates, of course, into showing investors that people want to buy a product right now. Expressing this temporal urgency, Cassandra, who participated in the social enterprise accelerator, says she learned to refocus on the money, fail fast, and ensure an immediate market. When we spoke, she was overhauling her product and marketing to meet this brief. Like Nathan and Clarke, Cassandra’s practice was adapting. She shifted away from a mission to ‘regain control over children’s screentime’, as was her initial motivation, and is now running through mini-market tests in search of something fundable.

Cultural spread: movement of people, integration of ideals

Culture does not simply emerge, but develops through constellations of social, structural, and interpersonal dynamics. Having identified a failure-speed ethos within the Australian startup domain, the next line of inquiry is how this eventuated – a question cast in the light of glocalization dynamics. Here, I examine two mechanisms by which the failure-speed ethos arrived, thickened, and embedded in the Australian context: international migration and institutional enculturation.

International migration

Saxenian (2007) describes the movement of foreign entrepreneurs into and back out of Silicon Valley as a defining feature of the global tech sector, whereby migrants become conduits of cultural, creative, and monetary transfer. Such movements correspond with the sample under study, the vast majority of whom have lived or spent considerable time overseas. This includes participants born elsewhere and migrating to Australia, Australians leaving to work overseas, and participants of all sorts who undertook extended international travel as part of their professional development. For most, this included stints in the United States – both in Silicon Valley and startup hubs in other major US cities – along with time (or origins) in Europe, India, and to a smaller extent, China, Singapore, and South Africa (regions where Silicon Valley culture has taken solid hold).

International mobility and migration have brought a transfer of values, ideas, and practices into the Australian sector. Kathleen, who runs a major yearly event for the startup community, cites time in Colorado as formative to her approach and related mentorship advice. She now encourages young entrepreneurs – especially women – to ‘jump in’ and ‘not worry so much if this one doesn’t work out’. Taylor, an Australian startup founder, looks to emulate the quick pace he experienced in Europe, India, and the US. And Callum, head of an Australian technology ethics organization, describes how working in Silicon Valley reshaped his perspective:

Thinking about [social impacts] from the full range of users who are going to use your product, I think is rare. I don't think that's built into the ethos of startup culture, which really sunk in for me while I was overseas. That startup culture is still a little bit ‘move fast and break things’ and now I'll always forgive the things that you just can't foresee … I’ve learned to give a certain level of amnesty, I think, that should be allowed.

Both Callum and Kathleen have been entrepreneurs themselves, but now focus on supporting others and the broader sector. As leaders and mentors, they pass on their perspectives to those with whom they work. This underlines the networked nature of cultural spread, by which values and practices transmit between people who collectively constitute a cultural whole. These transmissions do not, of course, happen in a vacuum but are supported by institutional infrastructures of training and socialization. In the startup sector, such trainings concentrate in accelerator programs.

Enculturation: accelerators and the embedding of ideals

Former editor-in-chief of Wired Magazine Chris Anderson (2012) describes accelerators as sites of opportunity that ‘coin entrepreneurs first and ideas later’ (pg. 8). These are less about any specific product or startup venture, and more about socializing entrepreneurial citizens. Accelerators can take various forms, but in general, these are competitive, cohort-based, time delimited training experiences through which early-stage startups develop business models and products under the guidance of mentors, learning from experts and gaining access to financial capital (Cohen, 2013; Mian et al., 2016). Though often hyped as disruptive alternatives to traditional education (e.g., Anderson, 2012; Thiel, n.d.), most major universities now have accelerator programs, as well as entrepreneurial curricula delivered as undergraduate and graduate degrees, certificate programs, and micro-credentials (Jansen et al., 2015; Metcalf et al., 2021; Morris et al., 2013).

Accelerators are widespread in Australia and growing still, with broad integration into university systems (Maritz et al., 2023; Nguyen et al., 2022). Of the entrepreneurs I interviewed, all had been through at least one accelerator, and most had been through several. These programs inculcate entrepreneurial identity and practice, based heavily on Silicon Valley logics.

Gene, who operates two related accelerators in a capital city, describes the programs’ curricula as derivative of the US sector, ‘refined’ for Australian values. He explains that practitioners should follow the ‘lean’ and ‘agile’ methods developed in Silicon Valley (i.e., quick development, ready to fail), but pitch less aggressively when dealing with customers and potential investors. The adaptation thus focuses on interpersonal moderation when enacting the failure-speed ideal.

While Gene’s accelerators are home-grown, others originate elsewhere. Lachlan, for example, leads a US-based program with international franchises. As co-director of the Sydney franchise, Lachlan explains how it meshes into the Australian startup scene:

The core program is designed in Silicon Valley, so we've got a lot of interaction with them. But then we can select local mentors and they challenged us to come up with a vertical program to run over top of theirs, focusing on a localized topic of interest.

Lachlan’s accelerator selected ‘green tech’ as the localized topic of interest, capitalizing on Australia’s abundance of renewable energy resources (i.e., wind and solar), and a broad commitment to environmental sustainability among the Australian public (especially younger cohorts who are also disproportionately represented in the startup sector) (Colvin & Jotzo, 2021). This localized overlay, however, still operated through the accelerator’s core cultural messaging: go fast, go big, and fail to succeed. Entrepreneurs learned to embody these lessons as part of good business practice and as a way of earning favor with the potential investors who might fund their green-tech ventures. As one investor who serves as a mentor in the program explained: ‘We’re looking for the big returns. We would rather push a company to move fast, swing bigger and maybe go bust than to just be moderately successful’.

‘Going bust’ is thus not only accepted but supported and instilled through accelerator messaging. Gene fosters this approach across his accelerators, teaching founders to preference agile reaction to failure over proactive prevention:

… Unforeseen consequences are inherent in innovation … Now, one approach is to analyze and plan a lot before you start … And the other approach is what we typically encourage, which is to be very agile. So, when you discover a consequence, you weren't previously aware of, you need to be agile about responding … 

The use of ‘agile’, ‘lean’ and similar vocabularies pulls directly from Silicon Valley playbooks, written by that sector’s most (in)famous and influential figures (e.g., Eric Ries, Peter Thiel). These playbooks directly and indirectly infuse institutions of entrepreneurial socialization in Australia, cultivating entrepreneurial citizens from a Silicon Valley source.

Asymmetries of the failure-speed ethos

The failure-speed ethos pervades Australia’s startup culture, shaping both product development and the conditions of work for entrepreneurial subjects. Yet, entrepreneurs are just one node within a complex of interrelated parts. This final section thus explores failure and speed eco-systemically, comparing founders on the one hand, and funders on the other. In this comparison, we observe speed’s double standard and failure’s uneven effects.

Speed and its double standard

It was several months into the project when I met George, the angel investor and central figure in Australia’s FinTech space. In a previous section, I excerpted his take on the value of startups moving quickly, juxtaposed against legacy companies’ slower pace. Yet, when discussing his own investment practice, George conveyed a different set of priorities and protocols:

I like to have that direct interaction with the founders and founding teams. And typically, that may be a relationship that builds over more than a year. It’s not a case of someone approaching me, ‘Hey, [George] come and invest, let's meet two or three times over coffee and then make a decision’. It’s a more intimate understanding of the people and their behaviors, their style their values and so on (emphasis added).

While entrepreneurs were all in a hurry, George remains slow and considered. If founders want his money, they can expect to wait while a personal relationship develops. This discrepancy surfaced for the other investors in the study, all of whom took pride in their duteous process of vetting investees.

This is not to say that investors expected careful vetting to result in high rates of success. On the contrary, they all rattled off the 90% failure rate of new startups and accepted that most investments would never return profit. For them, this is a game of both strategy and chance in which smart bets at high volume yield a few counterbalancing wins. This dynamic was rearticulated in panels, reports, speaker series, and among those I interviewed. In most cases, it was presented as mere fact. One participant, however, gave a more critical read, tying capital’s pace of expected return (fast) to the ubiquity of failure, suggesting an alternative mode. This exception is instructive, highlighting the rule while paving for possibility:

We need more slow capital. The way we build VC [venture capital] funds is incompatible with ethics. Funders … assume that one of their companies will make 100x and the rest are going to fail. So, everything they do is about that 100x. If we can somehow find a way, like a new financial instrument that has more modest expectations of returns, then maybe the capital isn't as greedy, and we can start taking the long game … (Nathan, consultant and founder).

Nathan is the consultant referenced earlier, who, despite commitments to inclusivity, leads a mostly-male team. He focuses here on building socially responsible products, framed once again in aspirational terms. This unmet aspiration, like that of diversity in his own company, draws attention to the dependence of entrepreneurs upon external sources of capital, and the demands such dependencies impose. These demands hinge directly on speed-of-return, achieved by startup companies operating on the edge of failure while investors take their time. It is this edge of failure that we next address, examining the asymmetries of a system in which failing is at once an immediate personal risk (for founders) and an integral component of long-term profit (for investors).

Failure’s uneven effects

It is useful to begin here with the available financial data pertaining to founders and the venture capitalists (VCs) who fund them. In Australia, founders report a (wide) salary range equivalent to $29,000–$200,000 USD (mean = $80,00 USD) and less than 1% equity during the company’s first 5-years (Palmer-Derrien, 2021b). A survey out of the US indicates that the average startup founder has about $5000 USD in savings, with a median of $7000 USD banked for retirement (Parr, 2015).¹¹ Although there is no data of which I am aware on startup cash reserves (in Australia or globally), I was told by a seasoned veteran of the Australian industry that this is likely due to a simple fact: startups have no cash reserves. The notion of reserve capital, she told me in an email, was ‘laughable’.

In contrast to founders, VCs are flush. Australian VC firms, considered tiny by global standards, raised AU$1.6billion ($1.1billion USD) in 2021, including Blackbird’s AU$500million ($340million USD) fund, SquarePeg’s AU$600million ($408million USD) fund, and two funds from AirTree totalling AU$250million ($170million USD). On average, Australian VC funds sit around AU$116million ($79million USD) with a median of AU$50million ($34million USD) (FundBomb.com, n.d.; Palmer-Derrien, 2021a).

Given this financial context, the stakes of failure vary within the ecosystem. For large investors, each failure is absorbed, distributed, and leveraged into profit – and those profits are primarily generated by a small number of high performing companies. For example, the Big Three funds in Australia can attribute most of their gains to companies valued between AU$100million and AU$1billion ($68million USD and $680million USD).¹² But what of the other companies across those portfolios? We can statistically expect the vast majority to eventually fail, and each failure represents a founder and/or founding team with little saved and much to lose – and likely significant funds already spent on overseas travel and institutionalized training.

This reality – little saved and much to lose – materialized for many of the founders with whom I spoke. Some were living with family and relying on parental financial support, others had single rooms in share houses, most were in debt, and many held fulltime jobs alongside their startup venture. Failure was at once expected and at the same time, weighed heavily and brought costs. Those costs were certainly economic, but also mental and emotional, as articulated by Dale – the 16-time ‘pivoter’ – who recounted some of the company’s downturns:

I had no money, I put all my money in, I kept putting money in. When we were really struggling for cash, I couldn't pay people. And I know these people are hurting and I didn't feel good about that.

Of course, not all founders struggle – somebody has to comprise the successful 10%. Indeed, many investors are current or former founders whose businesses generated significant wealth. Over the course of the study, I met and interviewed founders earning impressive salaries and employing full teams. I also interviewed people with safety-nets woven from personal affluence and/or family support. Yet the point remains that risks allocate differentially. Founders undertake personal and acute risks, juxtaposed against investors, for whom risks pool, aggregate, and transform into gains.

Conclusion

The preceding text delineates failure and speed as a paired value-set driving the culture and practices of Australia’s technology startup sector, understanding Australia as a glocal phenomenon in the midst of transition and flux. From this vantage, the failure-speed ethos finds lucid display, revealing converging variables that have heretofore been conceived in isolation. This failure-speed ethos traces through human migration and institutional enculturation, as people move between Australia and international sites of innovation – especially the US – drawing on the teachings and trainings provided by accelerator programs. Eco-systemically, the failure-speed ethos shows deep asymmetries, imposing differentially upon founders on the one hand, and funders on the other. These findings offer an account of an understudied Australian sector and from that, a window on global-local dynamics.

As a burgeoning sector within a tightly regulated and geographically isolated locale, the Australian case represents a study in possibility. Under these conditions, we might expect cultural divergence from the Silicon status quo, defined instead by local points of distinction. We may expect this, especially, in light of Silicon Valley’s cultural-economic decline vis-à-vis Australia’s nascent rise. And yet Australia, like so many others, is developing in Silicon Valley’s image. This finding carries sociological insight about the power of cultural hegemons and velocity of cultural inertia, while forecasting global futures in which waning sensibilities can have lingering cultural sway.

At the same time, it would be remiss to ignore the various forms of pushback and resistance to failure and speed that laced throughout the study. Interview data include practitioners who are selective about funders, choosing only those who allow for longer lead times; a consultant who thoughtfully advocates for less ‘greedy’ capital; and a new entrepreneur who, from the onset, commits to ethics and longevity over risk and speed. These and similar examples are exceptions rather than the rule, and often live alongside acquiescence in the very same participants. However, examples of resistance are important sites of agency, pointing toward generative fractures. Exploring such avenues and their varied potentials is a vital step for future research, interrogating intellectual questions about culture-in-practice and practical questions about how to effect change.

In this vein of cultural movements and social change, I close by highlighting a selection of international proposals and organizational missions that contest the failure-speed ethos as it pervades global technology markets. Albertson et al. (2021), for example, suggest an a-growth model of innovation, centering responsibility in place of economic expansion, while Hanna and Park (2020) build a case against ‘scale’. The Brookings Institute has proposed an oversight body, embedding frictions into the pipeline between technology development and distribution (Wheeler, 2021). And the Distributed AI Research Institute (DAIR), a global community of AI researchers, is founded on the principle of ‘slow AI’, displacing hurried production with a more deliberate approach (Strickland, 2022). These examples attest to alternative possible futures, along with a will to unsettle long-enduring standards.

Acknowledgements

I would like to thank Lorenn Ruster, Will Orr, and the anonymous reviewers for their invaluable contributions to this manuscript. I thank Dr Tim Recuber for curating this special issue. I am especially grateful to the study participants who provided time, energy, and insight without which this project would not be possible.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research was approved by the Australian National University Ethics Committee. Protocol 2019/826. This work was supported by Australian Research Council [grant number DE190100859].

Notes on contributors

Jenny L. Davis

Jenny L. Davis is a Professor of Sociology at Vanderbilt University and Honorary Professor of Sociology at the Australian National University. Her work intersects structural social psychology and technology studies, with a focus on politics and power [email: [email protected]].

Notes

1 Variations on this quote are commonly used and attributed to Thorne. However, I have been unable to find the original source.

2 See especially ‘burden of government regulation’ and ‘attitudes toward entrepreneurial risk’ indices.

3 Afterpay is a buy-now-pay-later (BNPL) app that was acquired by US tech company Block Inc. in 2021 for $US29billion.

4 https://digitaleconomy.pmc.gov.au/sites/default/files/2022-03/digital-economy-strategy-2022-update.pdf

5 https://www.cityofsydney.nsw.gov.au/strategies-action-plans/tech-startups-action-plan

6 https://www.melbourne.vic.gov.au/about-melbourne/melbourne-profile/smart-city/Pages/melbourne-innovation-districts.aspx

7 https://advance.qld.gov.au/entrepreneurs-and-startups

8 https://www.wa.gov.au/organisation/department-of-jobs-tourism-science-and-innovation/new-industries-fund

9 https://innovation.nt.gov.au/actions

10 SmatCompany is an online publication focusing on small and medium enterprises (SMEs).

11 These data are now relatively old but give a sense of founders’ financial starting place.

12 https://blackbird.vc/returns; https://www.airtree.vc/airtree-blog/our-2021-year-in-review ; https://www.squarepegcap.com/blog/2021-wrapped-a-record-breaking-year-for-fundraising-and-growth